Sources: Gilbert's Bedrock lectured inspectors on how to do their jobs

The firm orchestrated a hands-off policy from workplace safety regulators through high-level talks with the state, a Free Press investigation finds

Bedrock Detroit used its influence to get a rare meeting in the governor's offices and two of its executives were later allowed to tell state inspectors that Detroit's largest developer was exempt from scrutiny after it was cited for worker safety violations.

Executives of the Dan Gilbert-owned company had requested the meeting in the offices of then-Gov. Rick Snyder to "make sure everyone is all on the same page" after Michigan's workplace safety agency in 2016slapped the company with a $3,500 fine during renovations at the David Stott building in downtown Detroit.

Did Dan Gilbert's development company get special treatment?

Bedrock Detroit used bold tactics in an effort to avoid future workplace safety violations at its downtown Detroit properties.

Detroit Free Press

In May 2017, two weeks after that meeting, a pair of Bedrock executives appeared before veteran construction inspectors from the Michigan Occupational Safety and Health Administration and lectured them on how to do their jobs, emphasizing the company's role in downtown's resurgence, a Free Press investigation has found.

"It was hard to swallow," said one person familiar with what happened at the meeting.

In the end, state officials dismissed their case against Bedrock, despite an administrative ruling that the citations were correct and that the proposed penalties were appropriate. Bedrock has a portfolio of more than 90 properties downtown.

The allegations of preferential treatment are based on interviews with several state employees with knowledge of the back-and-forth between Bedrock and MIOSHA and documents the Free Press obtained under the state's Freedom of Information Act. The employees requested anonymity for fear of repercussions.

A U.S. Department of Labor report also confirmed that Bedrock executives told MIOSHA inspectors that an agency policy on construction "does not apply to them."

The federal Occupational Safety and Health Administration, which is a part of the Labor Department, investigated MIOSHA's dealings with Bedrock after inquiries from the Free Press.

How we reported this storyThis story is based on records obtained under the Michigan Freedom of Information Act, property records from the Wayne County Register of Deeds, City of Detroit building permits, and inspection data from the federal Occupational Safety and Health Administration’s website. An anonymous tip prompted the Detroit Free Press to investigate Bedrock Detroit’s dealings with the Michigan Occupational Safety and Health Administration.

Federal OSHA released its findings in December, saying MIOSHA decided to drop its case against Bedrock before the meeting in the governor's offices.

Bedrock claimed it was exempt from inspection because it did not control its construction sites. MIOSHA leadership disagreed with its inspectors and took the position that Bedrock was correct.

MIOSHA issued statements to the Free Press confirming the meetings and the general timeline of events, but the agency disputes its actions amounted to special treatment.

While MIOSHA Director Bart Pickelman acknowledged the governor's office meeting was one of a kind during his two-year tenure as director, he said the inspector made a mistake when he cited Bedrock after the 2016 inspection at the Stott.

Bedrock Detroit responds

The Free Press made multiple requests over several weeks for interviews with executives from Bedrock Detroit and a sister company, Rock Ventures. Whitney Eichinger, Bedrock's vice president of communications, did not make them available for comment.

In an email on Thursday responding to this report, Bedrock CEO Bill Emerson said:
"Safety has been and will always be the top priority at all of Bedrock’s work sites. There is nothing we take more seriously and prioritize more than the safety of construction workers on our sites.

In eight years of developing numerous large projects where tens of thousands of construction workers have contributed their time and skills we have demonstrated an exemplary safety record.

We work closely with regulatory agencies at the state and local levels to make sure we are following all laws and rules which help us maintain the highest levels of safety at each and every job site.”

The MIOSHA inspector found unguarded windows and cited Bedrock with four violations, including failure to guard against falls, and proposed the fine. Four other employers working at the building were also cited. Only Bedrock went to the governor's office to flex its muscle.

Bedrock executives requested the first meeting to “get an understanding of how the state views them and what they do," according to an email from the governor's office to Pickelman.

Snyder wasn’t in attendance at the May 2017 meeting, but members of his executive staff were, along with senior MIOSHA leadership, according to an email.

Bedrock executives were invited to asecond meeting, held later that month, where they were granted the floor and where they told several senior MIOSHA construction safety inspectors gathered in Detroit that the company was exempt from inspection, sources said. At that meeting, MIOSHA bosses did not challenge the Bedrock executives who lectured the inspectors, or object to Bedrock's claims, sources said.

One of those agency bosses had upheld the inspector's original findings after Bedrock first challenged the citations.

The inspectors "took an oath to protect people," said a source, who requested anonymity for fear of workplace reprisals. The inspectors in the meeting felt betrayed by their bosses.

Bedrock and other Gilbert entities have been credited with driving the revitalization of downtown.

One of Gilbert's projects involves building the tallest structure in the city, on the former site on Woodward Avenue of the imploded J.L. Hudson flagship store. Another project is the Stott building, a formerly vacant art deco skyscraper in Capitol Park that Bedrock purchased in 2015 and is turning into luxury housing and commercial space.

Gilbert's best-known business ventures include Greektown Casino, the Cleveland Cavaliers and mortgage lender Quicken Loans. The Free Press leases office space in a building owned and managed by Bedrock.

The Free Press made multiple requestsover several weeks for interviews with executives from Bedrock Detroit and a sister company, Rock Ventures. Whitney Eichinger, Bedrock's vice president of communications, did not make them available for comment.

In an email on Thursday responding to this report, Bedrock CEO Bill Emerson said:

"Safety has been and will always be the top priority at all of Bedrock’s work sites. There is nothing we take more seriously and prioritize more than the safety of construction workers on our sites.

In eight years of developing numerous large projects where tens of thousands of construction workers have contributed their time and skills we have demonstrated an exemplary safety record.

We work closely with regulatory agencies at the state and local levels to make sure we are following all laws and rules which help us maintain the highest levels of safety at each and every job site.”

Critics told the Free Press it was troubling that top MIOSHA managers allowed Bedrock executives to tell some of its inspectors that the company was off-limits.

Ken Moore, president of the union that represents the inspectors, said an employer should not be allowed to dictate when or whether it can be inspected.

“An enforcement agency should never be influenced by power or money,” said Moore, whose Michigan State Employees Associationrepresents 4,600 state workers.

“Regulations and the enforcement of regulations interfere with profit in the private sector and we deal with that every day,” said Moore, who learned about the Bedrock meetings from the Free Press. “State workers become a target because what we do interferes with corporate profits.”

Celeste Monforton, who spent 11 years working for OSHA and the federal Mine Safety and Health Administration in Washington, D.C., said Bedrock’s meeting with the inspectors at Cadillac Place in Detroitappearsinappropriate.

“For anyone to suggest a company can dictate when MIOSHA should come or shouldn’t come, it circumvents the whole purpose of the law, which gives it the authority to do inspections,” said Monforton, who lectures on public health at Texas State University.

A small roofing company cited by MIOSHA is not likely to get a meeting at the governor’s office, she observed. Bedrock, Monforton said, “is using their power and their access.”

Chilling effect on oversight?

The 2016 inspection at the Stott building was the first time Bedrock itself had been cited with a safety violation.

The meetings between MIOSHA management and Bedrock leadership have had a chilling effect on agency oversight of Bedrock and its contractors, according to sources. A Free Press review of MIOSHA records appears to support their assertions: Inspections and proposed penalties have fallen off at Bedrock-owned properties since the Stott was inspected.

In the two years leading up to and including that inspection, MIOSHA opened six inspections of 14 employers working at Bedrock properties, found 31 violations and collected $21,000 in penalties, the Free Press found.

In the two years after the Stott inspection, MIOSHA opened three inspections of four employers contracted to work at Bedrock properties, found two violations and assessed no penalties, according to Free Press research.

To reach its findings, the Free Press compiled a list of nearly 200 Bedrock contractors named in city building permits, records from the Wayne County Register of Deeds and published reports, then ran each company through federal OSHA records. Property records confirmed Bedrock or related companies owned the buildings at the time of the inspections. The Free Press could review only publicly available documents.

According to MIOSHA, violations found at Bedrock buildings included safety on demolition sites, fire exits and fall protection. At the Stott building, Bedrock's citations included unguarded window openings, which, the inspector noted, put workers at risk of falling as many as 34 stories.

Falls are the leading cause of death in construction, according to federal OSHA. In 2016, falls accounted for more than a third of all construction deaths — 370 deaths out of 991. In 2017, MIOSHA reported 39 workplace fatalities in Michigan, 10 of them falls at construction sites. None of those happened at the Stott.

Jason Moon, a spokesman for the state Department of Licensing and Regulatory Affairs, which includes MIOSHA, said the agency does not restrict which projects or employers staff members are able to inspect.

Part of what makes the agency’s response in handling the Bedrock violations so outside the industry norm, sources say, was how its top officials summoned veteran inspectors to what the state called “refresher training” conducted by Bedrock executives — in essence, industry officials schooling experienced inspectors on how to do their jobs and who they were allowed to inspect.

At issue was whether Bedrock should have been cited during the Stott inspection as one of the parties responsible for violations during construction, along with the other companies on the job site. The question was whether Bedrock was in control of the site, other contractors, and its own workers? Or was it merely the owner of the building, not acting as a general contractor?

Moon, the spokesman for LARA, said the reason Bedrock originally was cited was because Bedrock officials happened to be on-site when MIOSHA inspected the Stott.

"It is rare that MIOSHA inspectors encounter building/property owners or their employees during inspections as they are not actually doing work activity on the site," Moon said.

According to a MIOSHA policy on construction sites with multiple employers, an employer is in control when it has supervisory authority over the work site, including the power to correct safety and health violations itself or require others to correct them. Control can be established by contract or by practice.

Sources told the Free Press that MIOSHA can cite an employer if it is in control of the workplace, even if its own workers are not present.

In interviews with the Free Press, people who have worked on some Bedrock buildings said the company oversees construction and is in control of the work, which could make it subject to MIOSHA inspections.

For example, Bedrock has not had a general contractor during renovation of the 38-story Book Tower and adjacent Book building on Washington Boulevard in the three years that Ram Construction Services has been working on the exterior, said company President Bob Mazur.

Mike Shields, owner of BlackBerry Window & Door Systems of Kalamazoo, said his company has been installing windows at the Book building for over a year and works directly for Bedrock. He said there is no general contractor; instead, there are "project managers from Bedrock."

Brian Turmail, spokesman for the Associated General Contractors of America, a trade association in Arlington, Virginia, said general contractors are the “quarterback for the construction team … they assemble a team of subcontractors and specialty contractors and build what the owner has asked them to build.”

Turmail said a property owner that hires construction contractors directly could supervise them on-site or remotely, depending on the owner’s relationship with its contractors and the complexity of the project.

According to Bedrock's website, the company said it maintains "control over all aspects of construction. ... Our in-house construction team oversees each stage of the building process and provides supervision for third-party general contractors."

Safety inspector cited Bedrock

When a MIOSHA inspector showed up unannounced at the Stott building on Sept. 1, 2016, he found unguarded windows and spoke on-site with John Olszewski, Bedrock’s vice president of construction, according to agency records.

Olszewski told the inspector Bedrock had no accident prevention program at the Stott, and no one who was certified to render first aid, according to documents obtained by the Free Press under the Freedom of Information Act.

Olszewski also said he had been performing this kind of work for six years and had had no previous MIOSHA inspections. His biography on the Bedrock website says Olszewski has managed more than 200 projects in downtown Detroit involving $600 million in renovations, upgrades and new construction since 2011, the year Bedrock was founded.

According to worksheets the inspector used to calculate penalties, all the contractors working at the Stott were “directly contracted with Bedrock Detroit.”

The inspector called Bedrock a “controller” and noted that when he arrived at the Stott, he learned that company officials were already on the way “to meet with subcontractor Grunwell-Cashero Co. … for a progress meeting.”

MIOSHA cited Bedrock with four violations: failure to protect against falls, no accident prevention plan, no one certified in first aid, and lack of information on-site related to a broadcast antenna on the roof. The proposed penalty of $3,500 was for one of those violations — the unguarded windows.

MIOSHA also cited four other contractors at the Stott for violations such as unguarded windows and problems with scaffolding.

Those contractors agreed to settle their cases with MIOSHA, which reduced by half the penalties against Sloan Environmental Services, based in Taylor; Grunwell-Cashero, a Detroit-based company that specializes in historic preservation of masonry, and Fryz Services, of Redford. Employers that agree to informal settlements are entitled to penalty reductions of up to 50 percent but must agree to correct violations.

MIOSHA dropped the violations and penalties against a fourth company, Environmental Testing & Consulting, based in Romulus.

When reached by the Free Press, Eric Sloan of Sloan Environmental said: “I prefer not to make any comments.” Officials of Fryz and Grunwell-Cashero did not return calls. Environmental Testing acknowledged it had been cited and subsequently cleared.

In the months before the inspection, Bedrock filed paperwork with the Wayne County Register of Deeds stating that Grunwell-Cashero was the general contractor at the Stott, but an official of the bricklayers union said he did not see the company acting in that capacity.

“I’m not aware of them being involved with other trades,” said Chuck Kukawka, president of Local 2 of the Michigan Bricklayers and Allied Craftworkers Union, which had members working at the Stott building. “They never expressed anything about running other crews.”

And Jeremy Westcott, managing director of Environmental Testing & Consulting, which did air testing at the Stott, said his company worked directly for Bedrock, period.

Records obtained by the Free Press from MIOSHA show that Bedrock had contracts directly with several companies working at the Stott, including Grunwell-Cashero for facade renovations, Fryz and Environmental Testing & Consulting.

In November 2016, two months after the MIOSHA inspection at the Stott, Bedrock brought in Walbridge as the general contractor, according to records filed with the register of deeds. Walbridge is a full-service construction company based in Detroit.

A meeting in the governor's offices

It isn’t uncommon for employers to challenge state or federal citations and fines but Bedrock took its opposition further. According to emails obtained by the Free Press, Matt Rizik of Dan Gilbert’s Rock Ventures asked the governor’s office for a meeting to discuss MIOSHA.

“Matt and his team want to get an understanding of how the state views them and what they do. They just want to make sure everyone is all on the same page,” Wendy Wisniewski, executive assistant tothen-Gov. Snyder’s cabinet director, said in an email to Pickelman in April 2017.

The meeting took place the next month in Lansing, in the executive conference room on the second floor of the George W. Romney building, home to the governor’s offices. Attending were Bedrock’s Kraig Peterson, senior counsel, and Olszewski, vice president of construction, and two Rock Ventures officials: Rizik, the chief tax officer, and Howard Luckoff, general counsel.

Snyder's spokesman, Ari Adler, saidlate last year thatZimmer was not available for an interview about the meeting. Downplaying the significance of the gathering, Adler said other employers have also had meetings about MIOSHA in the governor's office, but he wouldn't name them, saying, "I don't have a list."

The governor's office is not subject to open records laws, so a calendar of appointments is not available to the public.

Agency held 'refresher training'

A week after that first meeting, Allen invited the Rock Ventures and Bedrock executives to “refresher training” with some of MIOSHA’s construction safety inspectors, who had decades of experience.

“As discussed at our meeting we are conducting refresher training to help ensure our enforcement staff” is “appropriately” applying a MIOSHA policy that deals with job sites where more than one employer is present, Allen wrote in an email to the executives.

“MIOSHA would like to accept your offer to participate in a meeting with the compliance officers in the southeast portion of the state. We would like to invite you to the refresher training to explain your operations to our compliance staff so everyone has a better understanding of when the Multi-employer Work Site Policy may or may not apply,” Allen wrote.

Several of MIOSHA’s construction safety inspectors were summoned to Cadillac Place, a state office building in Detroit, and were told by their bosses they were there just to listen, sources told the Free Press.

Bedrock sent Olszewski and Scott Collins, a Bedrock project director, to the meeting, where two MIOSHA officials also were present, Allen and Lawrence Hidalgo, director of the construction safety and health division.

According to several people familiar with the meeting, Bedrock's Olszewski and Collins ran the meeting from the front of the room and told the state inspectors that Bedrock was not to be cited because the company was not directly involved in construction projects at its properties.

MIOSHA officialsAllen and Hidalgo did not question or dispute Bedrock’s position, the sources said.

The Bedrock officials also boasted about the number of buildings the company owned and its role in reviving downtown. They said they were doing many, many projects and would continue to do many more.

One of the safety inspectors challenged the executives, saying Bedrock did indeed hire contractors at the start of some projects, such as the asbestos abatement companies, and that made Bedrock subject to MIOSHA.

The inspector also noted that Bedrock has employees at some construction sites, which exposes them to potential hazards and subjects the company to MIOSHA regulation.

An agitated Olszewski turned to Allen and said: “This is not what we discussed at the governor’s office.”

After the Bedrock executives left the meeting, Hidalgo turned to the inspector who raised questions and said: "I told you not to ask questions."

The sources said that inspector was docked two days’ pay shortly after the meeting for alleged time-card violations. With his union steward’s help, he fought the violations and recovered his pay.

In a recent interview, Pickelman told the Free Press that the action against the inspector was unrelated to the meeting at Cadillac Place.

Pickelman and Moon also insisted there was nothing unusual about the "refresher training" with Bedrock, saying that over time other entities have been brought in for specialized training. Those sessions included discussions about safe operation of tools, masonry walls and electrical safety.

According to MIOSHA's version of events, both inspectors and MIOSHA bosses disagreed with Bedrock during the meeting, and that the managers informed Bedrock executives afterward the company was subject to agency policy on a "case-by-case basis."

MIOSHA managers also informed Bedrock executives at the earlier meeting in the governor's offices that the company would be evaluated as a controlling employer if acting as a general contractor, according to the federal OSHA's investigation of MIOSHA's handling of the Bedrock inspection.

OSHA also found that during their meeting with the MIOSHA inspectors, Bedrock executives explained their involvement in the development of downtown Detroit and, indeed, told them that MIOSHA's policy on construction sites "does not apply to them and their work in these buildings."

The Labor Department also noted that MIOSHA staff disagreed with that assessment, and after the meeting MIOSHA management told the inspectors that Bedrock "would be treated like everyone else."

"MIOSHA ... advised their compliance officers that any determination of coverage would be done on a case-by-case basis, for all employers, including Bedrock," the department said.

Two sources said the managers never said that, however. A third said someone mentioned that Bedrock would be treated on a case-by-case basis.

MIOSHA tosses violations, penalties

Months before that "refresher training" meeting, Bedrock had contested the citations.

MIOSHA denied the company's first appeal.

"The department's position is that the violations have been correctly cited and the appropriate proposed penalties and abatement dates have been assigned," MIOSHA told Bedrock and its lawyer in December 2016.

And the person who signed that letter? Allen, the same manager who dispatched the inspector to the Stott in the first place, and who later allowed the Bedrock executives to lecture that inspector and several others.

Bedrock contested the citations a second time, in January 2017, but they weren’t officially recorded as dismissed until the case closed in June 2017, days after the meeting at Cadillac Place, OSHA records show.

ButMIOSHA'S Pickelman told the Free Press the agencyhad wanted to dismiss the counts in March 2017, when it told the Board of Health and Safety Compliance and Appeals that it wished to dismiss the citations against Bedrock.

The board reviews contested MIOSHA cases. Like MIOSHA, it is part of LARA.

Moon, the LARA spokesman, said a first appeal is usually affirmed by the enforcement division that issued the citations, and that a second-level appeal prompts a more in-depth review by a separate division.

According to Pickelman, MIOSHA had wrongly cited Bedrock as a “controlling employer” at the Stott building, which is why the meeting of Bedrock officials and state inspectors was scheduled and the violations ultimately were dismissed.

“Typically, the ‘controlling employer’ on a construction site is the general contractor who has employees on-site regularly, if not daily,” Pickelman said in an email. “Bedrock’s role on this project was not as a general contractor, it was more of an owner representative and their employees were not on-site on a regular basis.”

According to OSHA's findings, released in December, MIOSHA did follow its policies in dismissing the citations. The Labor Department did not address whether Bedrock acted as a controlling employer at the Stott.

It's important that MIOSHA inspectors be able to oversee construction projects without interference, said Shereef Akeel, a Troy lawyer who has practiced employment law for more than 20 years.

“They serve as the check and balance to ensure that work is being done properly … to keep employees safe and out of harm’s way. When you remove that check and balance, accidents will happen."

Jennifer Dixon is a reporter on the Free Press Investigations Team. She has covered government, business and workplace issues in Detroit for two decades. Contact her at 313-223-4410 or jbdixon@freepress.com.

To read other Free Press investigations, go to www.freep.com/news/investigations. If you have a tip that should be investigated contact us at investigations@freepress.com